BRUSSELS, Nov 26: The European Commission called on Wednesday for a 200-billion-euro ($259 billion) stimulus package to snap Europe’s economy out of recession through spending hikes and tax breaks.

“Coordinated European action can and will make a difference,” commission chief Jose Manuel Barroso stressed as he unveiled the wide-ranging package.

“Business as usual is not an option. That would lead to a vicious recessionary cycle,” he told reporters, adding that was “the lesson of the 1930s.”

Of the total, 170 billion euros will come from national government budgets and about 30 billion euros from the budgets of the European Union and the European Investment Bank.

Barroso said the bulk of the measures, made up of a smorgasbord of national and EU programmes, would be rolled out as soon as the beginning of next year and the rest over the course of 2009 and 2010.

The combined national and EU campaign, worth the equivalent of 1.5 per cent of the European Union’s gross domestic product (GDP), exceeded the 130 billion euros that Barroso had mooted as a possible target in recent days.

The European Commission will urge member states to formally sign on to the plan at a Dec 11-12 summit and asked finance ministers to ensure that it is followed up afterwards.

However, the commission’s proposals met with a mixed reaction as some governments welcomed the package and others wondered where the money would come from.

“If there is something that’s missing these days on the market, it’s money,” said Polish Prime Minister Donald Tusk. “I would be cautious about such political declarations.”

While Brussels has been drafting pan-European recovery plans, a growing number of individual countries in European Union have pressed ahead with their own national packages.

Germany, Europe’s biggest economy, has voiced scepticism about EU-wide initiatives and German Chancellor Angela Merkel warned on Wednesday against a ‘race’ between European states over the size of their stimulus measures.

“We should not fall into a race of billions (of euros),” Merkel said in a speech to the German parliament.—AFP